The District of Houston is raising taxes 20 percent on heavy industry (Canfor) to help meet infrastructure needs.

Houston mayor and council set property tax rates at a finance meeting last Tuesday, April 14.

Different tax rates are set for the seven different classes, including residential, heavy industry, light industry, business, recreation or non-profit, utilities and farms.

Property taxes in all classes are going up as the District of Houston restructures after the closure of Houston Forest Products (HFP), which cost the District $480,000 in property taxes.

In 2015, residential taxes will go up 2.7 percent, which is $27 for the average $140,000 home, said Houston Director of Finance William Wallace.

Taxes on all other classes except for heavy industry will average a three percent increase.

For heavy industry, which is essentially Canfor, property tax rates will go up 20 percent in 2015.

Wallace says this tax rate includes the three percent increase applied to every class plus a new annual amount of $264,000.

With the 2014 timber licence swap between Canfor and West Fraser, Wallace says Canfor acquired 55 percent of what was previously milled at HFP.

The $264,000 which the District is recovering from heavy industry is 55 percent of the total taxes lost when HFP closed.

Canfor is the only heavy industry in the District except for Pinnacle Pellet and the Huckleberry Mines parking lot.

Canfor also has property in other property classes.

In 2015, Canfor will pay $1.95 million in property taxes, which is 51 percent of the total District tax base, said Wallace.

In 2014, they paid $1.64 million in property taxes, which was 42 percent of the total District tax base.

At that time, HFP still paid taxes for their mill and made up 14 percent, Wallace said.

West Fraser still pays $59,000 in 2015 property taxes to the District for their remaining assets, which is only 1.6 percent of the total District taxes.

Houston Mayor Shane Brienen says the District is in tough spot with the former HFP timber that West Fraser kept and will continue truck to their mills in Smithers, Fraser Lake and Vanderhoof.

“What we are left with as a community now, is that this timber is still out there and being harvested but… we’ve lost that mill and we’ve also lost any chance of someone come in and put in a small mill, because there is just not enough fibre to support that.”

“A small mill would bring revenue to the District.”

Wallace says the timber West Fraser transferred to Canfor will make Canfor’s income more certain and will enable them to generate more profits.

He estimates that the Canfor sawmill is worth over $150 million and generates annually over $25 million in after-tax cash flow.

“The future profits from the transferred timber volume will continue to be supported by the District of Houston community and its infrastructure,” Wallace said.

The extra $264,000 taxes from heavy industry will go to reserves for infrastructure repair and replacement only, he said.